All of French Company Law: ordinary law of companies and specific regime for different types of companies

Company Law (en cours)

Established by Law No 83-1 of 3 January 1983 , investment certificates were securities granting the right to receive dividends like shares, but without voting rights. The extraordinary general meeting of a joint stock company, or in companies that do not have one, the body acting in its place, could decide, based on the report of the board of directors or the management board, as applicable, and o …

Principle

Established by Law No 83-1 of 3 January 1983 , investment certificates were securities granting the right to receive dividends like shares, but without voting rights. The extraordinary general meeting of a joint stock company, or in companies that do not have one, the body acting in its place, could decide, based on the report of the board of directors or the management board, as applicable, and on that of the statutory auditors, to create, in a proportion not exceeding one-quarter of the share capital, investment certificates representing pecuniary rights and voting right certificates representing other rights attached to shares issued during a capital increase or a split of existing shares.

While, since the Ordinance of 24 June 2004, new investment certificates can no longer be issued, those issued before its entry into force remain valid. Like other marketable securities, they are negotiable . Their nominal value is equal to that of the shares. When the shares are split, the investment certificates are also split . Holders of investment certificates can obtain communication of corporate documents under the same conditions as shareholders .

In the event of a capital increase, the holders of shares and, if any, the holders of investment certificates, benefit from a preferential subscription right to the investment certificates issued, and the procedure followed is that of capital increases . The holders of investment certificates waive the preferential right in a special meeting convened and deliberating according to the rules of the extraordinary general meeting of shareholders. The voting right certificates are distributed among the holders of shares and the holders of voting right certificates, if any, in proportion to their rights .

In the event of a split, the offer to create investment certificates is made simultaneously and in proportion to their share of the capital to all shareholders . At the end of a period set by the extraordinary general meeting, the balance of unallocated creation possibilities is distributed among the shareholders who have requested to benefit from this additional distribution in proportion to their share of the capital and, in any case, within the limit of their requests. After this distribution, any remaining balance is allocated by the board of directors or the management board, as the case may be .

The voting rights certificate, which must be in registered form , can only be transferred along with an investment certificate. It can also be transferred to the holder of the investment certificate. In accordance with the sixth paragraph of Article L. 228-30, the transfer automatically results in the reconstitution of the share in both cases. The share is also automatically reconstituted in the hands of the holder of an investment certificate and a voting rights certificate. The holder must declare this to the company within fifteen days. Failing this declaration, the share is deprived of voting rights until regularization and for a period of one month thereafter.

No certificate representing less than one voting right can be issued . The general meeting determines the terms for issuing certificates for fractional rights .

In the event of a free distribution of shares, new non-voting preferred shares with the same rights as investment certificates must be created and delivered free of charge to the holders of the old certificates, in proportion to the number of new shares allocated to the old shares, unless they waive this right in favor of all or some of the holders .

In accordance with Article L. 228-34, in the event of a capital increase in cash, except for those reserved for employees based on Article L. 225-138-1, new non-voting preference shares are issued with the same rights as investment certificates in such a number that the proportion existing before the increase between ordinary shares and investment certificates is maintained, taking into account these preference shares, after the increase, considering that it will be fully realized. The owners of the investment certificates benefit, proportionally to the number of securities they hold, from a preferential right to subscribe irreducibly to these new preference shares. At a special meeting, convened and deliberating according to the rules of the extraordinary general meeting of shareholders, the owners of the investment certificates may waive this right. The unsubscribed preference shares are allocated by the board of directors or the management board. The realization of the capital increase is assessed on its portion corresponding to the issuance of shares. However, by way of derogation from these provisions, when the owners of certificates have waived their preferential subscription right, no new preference shares are issued.

Finally, in the event of an issuance of bonds convertible into shares, the holders of investment certificates have, in proportion to the number of securities they hold, a preferential right to subscribe to them on an irreducible basis . Their special meeting, convened and deliberating according to the rules of the extraordinary general meeting of shareholders, may waive this right.

These bonds can only be converted into non-voting preferred shares with the same rights as investment certificates .

Law No 83-1 of 3 January 1983 on the development of investments and the protection of savings, OJ of 4 January 1983.

Commercial Code, Art. L. 228-30, para. 5.

Commercial Code, Art. L. 228-30, para. 2.

Commercial Code, Art. L. 228-30, para. 3.

Commercial Code, Art. L. 228-30, para. 4.

Commercial Code, Art. L. 228-30, para. 7.

Company Law (en cours)

89. Principle

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Les notions juridiques connexes

89. Principle

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Les notions juridiques connexes

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